Buyer’s Guide – Negotiations
Now that we have made The Offer, now we need to talk about negotiating. We are going to keep this really high level because this is definitely an area to lean on your Realtor®; however there are a few key things you do need to know.
If it isn’t in writing, it doesn’t exist
Often while negotiating deals, after the initial offer is submitted the negotiation will proceed verbally. At least in our local Edmonton market, this is the norm. Some sellers and some buyers prefer a paper trail all along the way, which is entirely ok, but be prepared that in real life, this is not always the case. We will often use written counter offers to attempt to add leverage or seriousness, but we find it important to be flexible when we do this.
All that said, if when you sign off on the final agreed offer there is something missing, having had a conversation about it won’t be enough.
Accept, Reject, or Counter
During the process of an offer, both sides always have three options:
1) Accept the offer as presented.
2) Reject the offer outright.
3) Counter the offer.
It’s important to know that as soon as a counter offer is made, contractually it is as if the offers and counter offers that have gone back and forth to that point don’t exist. It’s a clean slate of sorts (except that both sides carry the mental history of the thing). So you submit your offer and the seller can accept, reject, or counter.
Say they counter you: you can accept, reject, or counter. If you counter again, they can accept, reject or counter. See the pattern? This goes on until someone either accepts or rejects. It won’t go on forever though – people get negotiation fatigue and then they often get frustrated. We do our best to avoid that.
The offer is not binding until everyone has signed and initialled ALL changes
It’s always imperative to get offers signed as soon as possible after agreement has happened. Until it’s completely signed, both sides have the right to back out.
This is a topic that we will go into in a lot of depth in a future blog. But here is the basic thing to know: If you have written an offer and are part-way through negotiating and another offer comes in, you do not have the right to finish negotiating. It’s up to the seller whether they continue with your offer, stop the process entirely, or give you an opportunity to decide if you want to compete in a multiple-offer scenario. If you are in a multiple-offer situation, the seller may give you the chance to revise your offer.
It can sound like a lot, but remember, this is our all day, every day. This is why it’s so important to have a great agent that you can trust and communicate well with. We’ll guide you through and take out as much complication as possible.